Question
Weismann Co. issued 11-year bonds a year ago at a coupon rate of 12 percent. The...
Weismann Co. issued 11-year bonds a year ago at a coupon rate of 12 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 11 percent, what is the current bond price?
Homework Answers
Answer #1
Value of Bond = 
Where r is the discounting rate of a compounding period i.e. 11%/2 = 5.5% _ _ (Semi Annual )
And n is the no of Compounding periods 10 years * 2 = 20 periods_ _ (Semi Annual )
Coupon 12%/2 = 6%
= 
= 717.02294916 + 342.72896327
= $ 1059.75
Value of Bond is $ 1059.75
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